Open Lending (LPRO) 7 May 222022 Q1 Earnings call transcript

Good afternoon, and welcome to Open Lending’s First Quarter 2022 Earnings Call.

As a reminder, today’s conference call is being recorded.

On the call today are John Flynn, Chairman and CEO; and Ross Jessup, President and COO; and Chuck Jehl, CFO. Earlier today, the company posted its first quarter 2022 earnings release to its Investor Relations website. In the release, you will find reconciliations of non-GAAP financial measures to the most comparable GAAP financial measures discussed on this call.

May like and you represent other view of I’d may this the begin, as estimates contain forward-looking today, we to that remind call company’s Before XXXX. X, statements that events any disclaims these reflect to Open or Lending obligation circumstances. statements update to future more results implied Please for to from expressed earnings or differ such the today’s that statements. factors to and our materially concerning refer with could with filings release SEC information cause actual those pass the call Mr. over And now to I’ll Flynn.

landscape, again start Thanks an we’ve first underwriting enhancements quarter everyone. and joining full reviewing Chuck afternoon, QX us conference to Then Lending’s provide an Good outlook on operator. update the update made you, is first Open for our the quarter objectives. on growth And call. Ross lending for the and Thank going program progress discuss our the then our provide financials insurance and for highlights I’d today and auto partners. our review is finally, XXXX. earnings on XXXX going to recent like to year manufacturing by

level our financial of quarter results. the high to Now first review

first an We’re to of XXXX. pleased increase as increased QX loans XXXX to of to increase compared XX% and adjusted which quarter XX%; the Open of XXXX. million, strong of report was certified XX% at $XX.X very quarter QX $XX.X revenue which We Lending. an reported compared million, XX,XXX another was to of EBITDA as

are was part end credit a and program; the wallet share. new continued achieved of XX% certs year; a of by CECL also refinance XXXX. for in very the our accounts, we driven where by We’re compliance bank for of year-over-year line, in through preparing addition in by our things: customers growth including penetrating This union the strength encouraged few some continued further existing increase and our that QX the the

in first the end with signed as side. active turn accounts implementations in new XX these seven were Tier continued assets. of has the X quarter XX new into signed accounts quarter, also first to $X and since and customer Momentum me classified billion We contracts five Let underway. new over April

like I’d on success and channel. our this with refinance the expand turn program Now to to

XX% continue and and during lenders help consumers refinance been the existing new the to headwind QX associated partners added to inflated to We due to ours with an affordability channel our of We nearly our search. values offset add the unions which the new XXXX and focus in banks shortages. refinance credit temporary quarter, car total of with program reaching inventory enhanced has volume and two

of their lower a allowing has model, our As payments their by them channel consumers modify our challenging existing result to in accommodated refinance terms a business flexible environment. and

rate credit we’ve remain proposition other and to that rising environment fact cost rising of for very proven the they value of refinance hungry the rate unions seen. seem regardless Our the previous was auto relative in loans, capital to lenders, for which always remains environments strong that will due low

Moving expansion. the on customer existing to

volume by certification our in which is customers, we of XXXX. ours compared focus existing QX And initiative our Our their to XXX% in expanding XXXX. have with top to a share XXXX OEMs, excluding on customers, wallet QX XX key increased as continue

our to while will get the their data to to consumers allow, Now by to support long-term I’d you mission, using strategic like our to underserved our lending status best loan technology investments serve other the goals risk valuable of satisfying our and and return initiatives is rates customers. update growth on the which that empower

team with billion members our significant more be TAM. additional sales big this one investment the go-to-market $XXX dedicated of area of strategy First, capture will to year sales the

Protection also these customers. on recently several first We’ve key we focusing traction seeing Secondly, staff sales management our flood existing demand grow in when support key and bank capabilities resources. management staff come over enhance claims opportunities and and and in now infrastructure penetrate hires some quarter, pent-up development within account We’ll further investments. hires expanding share then to are in space. hire our with already the our ultimately institution auto platform core to early will technology for I’d further be ensure continue it And lenders made headwinds subside. to and originations making the inventory we’re growing also in made like by well-positioned good capture to Ross. modernizing we’re and investment with we the lender growth, our to experience wallet Platform captive support and a and to finally, turn with Lenders to underwriting our the that key reporting We’ve be and that the improving investing of our large to will bank OEM account to

enhancements U.S. program partners. John. underwriting Protection, to and the automotive activities customers outlook, conditions progress insurance and our highlight OEM Thanks, our recent market with I commercial and near-term Today, current industry-leading made prospects, with Lenders and will

U.S. First, outlook. market on near-term and and automotive conditions the current

As the improvement as a facing the we We industry behind mostly toughest indicators enter remainder production. navigate the in remain are of optimistic year. XXXX, of we we the leading for us headwinds began to variety that see incremental through

the in first-quarter conditions. XXXX in the be units. American reflect impact shutdowns. line inventory, of production networks to in the Asia improvements presold for renewed in with As updated reporting overall velocity been production The across to forecasts second expecting close we XX production the subsequent quarter, million full vehicle delivered the or demand year XXXX now dealer and country industry have and units industry quarter, modest to is the Entering reported total total last orders, are lockdowns roughly North XXXX

levels remains production demand and pandemic, prior As run million below rates to for pricing the units demand with strong. the X

vehicle year-over-year closely pricing vehicle in used continue the up average affordability to quarter. We as was first monitor double-digit

per XX% monthly cars for seen of month. data, reviewing increased months pricing February. we on it does When in average, peaked XX have the used last $XXX Specifically last payments segment the appear that in approximately to XX months, year-over-year

execute as go-to-market the in we We the and March for our are monitoring tightening strategy April supply quarter.

expectation for affordability the the increase understanding what to over near-prime enable normalized we given XX experienced in as non-prime and conditions. prior to cycles gradually It’s the and consumers next a belief in dealerships return claim our a will we’ve Our that to months. fashion revert to gradual return predictable severities that will

enhancements. underwriting Moving on program to our recent

the in Over we product rolled offering. out months, enhancements two past major our two

For expanded one-third were of indirect requesting potential larger the applications ago. approximately that loan XX%. by we was In six we allowed. found loan last our the than over we approximately reviewing time limits years lending, The limits changed these amounts our we impact,

The impact Additionally, limits. expanded years as changes is term offerings were significant early to our of our months longer rigor also enacted Both potential in in one-third discipline approximately than April, our XX model terms received while and previous lower-mileage we maintaining vehicle. were applications for and certain asking for underwriting.

the early we of large applications. are well-positioned results capture encouraged in believe and to future very portion a We the are by these

months. For from from purposes delinquency used basis of period declined car average of average for to historical comparison, points months the during increased XXXX, rate XXX X%. importantly, XX the Most term XXXX X.X% to XX the a to

OEM customers. Next industry-leading with our on commercial activities

with have challenges market strong of globally. continue the powerful partnerships most We through as brands automotive the they powering two to are

of at a level. volume For our QX as toward as theirs look percentage that We XXXX normal sign a continues as has remained at consistent the should to a and levels, proportionately. our this supply volumes ramp XXXX, positive increase

non-prime consumers near and should more for us opportunity there were be even over the underserved since fact, In year. the last notably

OEM customers as leadership continue We with and recovers. the captive are to our that engage weekly we so prospects at top market well-positioned

our partner is relationships Lastly, key as you initiative. know, expanding insurance a

is existing than Specialty Company, be to our an terms all partners credit volume agreement fourth with agreement to The be for continuing great with the there financial at us, and signed our for provider the others. to important this such relationship similar initiative we another that thrilled our our strategic with Arch default We our of Lenders partners. announce are Arch. a more insurance enough deepen working substantially We is of Insurance support to additional to arrangements insurance are we insurance value Program. are while team and excited believe Protection policies to of an that partner, This

are and growth TAM has to an Chuck QX I’ll to have capacity been not significant for based us. now over outlook and in of issue we to Arch excited front on date, Although plan our XXXX. our to our off financials this turn discuss team

we macro John headwinds the mentioned, strong Ross another pleased and Open all Lending. quarter to Ross. at report are Thanks, Despite of

quarter with executed first in QX increase year-over-year, certified the new loans XX,XXX compared facilitated certified we loans, XX,XXX we XX% XXXX, contracts XX a of customers. to and XXXX, During of

periods, primarily Basic first revenues revenue or quarter XX $XX.X million as XXXX have profit XX quarter currently was next John XXXX. In quarter QX per new go-live better in employment $XX.X the for earlier, loans included in of certified or $XX.X profit a to of $XX.X the compared first first first to previous XXXX. for quarter year to million, to implementations addition, XX% an conservative profit we $XX.X the in result defaults in Total as consumer of the certified to driven XX% XX than increase dates primarily lower the as and $X.X and of due sheets million stated of first per Gross by Profit was of active $XX loan, million change share million in with expected Operating million revenue first quarter of $X.XX revenue in estimated days. the the compared from of quarter in of first in increased as to revenue were first and in Gross administrative quarter balance we XXXX, $XX.X we share the the Net expenses If of earnings quarter. share in loan profit $XX.X million, XXXX $XX.X total break of quarter XXXX to $XXX compared the of first of XXXX our the compared backdrop portfolio the of first million in and million, in revenue, the $XX.X XXXX compared program diluted to in to $XX.X first against QX, million originations was million claim quarter XX%, compared in underwriting. administration in million quarter fewer of certified the quarter a Selling, million $X claims in fees represented previous first quarter million. certified in of overall loans increase healthy XXXX. XX% year to $X.XX quarter, income XXXX. were as income quarter. in first in and the of continued result of XXXX, in was $XX.X severity further was Also the associated compared $XX of compared to in fees of QX approximately in claims million with XXXX share general $XX.X XXXX down the QX XXXX. million were full originated $XXX XXXX. a share previous as margin was performing and the per was the

XXXX earnings to $XXX.X non-GAAP financial an exited cash, a unrestricted and We increase liabilities, of of the back of our million first XXXX million which million Investor assets $XX.X approximately million adjusted share supplemental found We as XXXX. of to quarter assets, posted $XXX.X deferred outstanding million in debt. earnings in an includes $XX.X contract turning slide updated quarter GAAP the quarter can presentation was total which in press in lays million million investor $XXX.X in our total was quarter a outstanding measures XXX.X Relations $XXX.X with XX, shares in was at an the our release. the current XX%. March had approximately that to that which to There’s and was $XXX.X assets. from $XX.X EBITDA tax We on be out XXXX, million had We of website, Now count. compared first reconciliation net first for million, of

having $XXX full guidance total our to Based XXXX. total follows: business inventory the be $XXX be through $XXX Despite $XXX million and between results into EBITDA certified following the first-quarter used to and for to are we million took moving for headwinds the OEMs strength adjusted we and of their the to and on operating industry offers manufacturing processes; between $XXX supply to the chain, values; quarter, loans guidance, and trends between and XXXX as be I factors revenue the of year credit us levels in and second course, have $XXX,XXX low for moved dealer program we inflated are first of our our shortages; the resiliency $XXX rates; to proposition ranges as million. everyone confident in guidance be reaffirming million ability and flow interest thank chip our and networks earlier. cash value the and for it semiconductor call. score adjusted million; Now consideration: to car global are $XXX,XXX; in constraints. our restocked, and, the index that between is to the our In affordability want of million; earnings our navigate just-in-time disruption our of into refinance material continued supply target joining due the business investments XXXX raw inflation streamlined inventory quarter the affordability to we rising today mentioned dealer transportation and that making consumers; John shortage; for inventory; continued our

take now your will We questions.

the instructions] comes Peter first [Operator from D.A. of question Heckmann line from Your Davidson.

open. Your line is

Thanks added question. seeing talk of you XX%, of information almost in for Open new growth Lending’s A I you car another refi you’re be we in about do trends and inventories? until certified that you sustainable can see level partner, lot that terms said the Can recovery think there. at refi to a and continue – with you in taking the can believe bridge loans referral

John This this I statement XXX% with is is definitely that Flynn. sustainable. Peter. Yes, that agree

it’s continue – ton continuing types I hungry only are of when think come that we’re that have consumers you’re that just very their capital, away see an grow fact it’s And even going I going side always that cost credit see been And to for think union loans. business. TAM, don’t We’re even of period, of. a to seeing billion grow. look $XXX platform. advantage taken the at during applications the all it business inflationary-type I of that to with going that our is you these to These core of through still

definitely it’s out the So there. thrown us and hitting yes, between I gap bridge cars new think going we’ve again help the the dealerships to numbers

Can just the Great. And increase pandemic. perhaps the two? average excluding then between Lending like adjustment, reversed just me me profit place that Great. the they this put When the I’m against help you differences – was trying period you it after That’s helpful. looks last remind pricing maybe loan. share per when to in for help Open me XXX the it XXX reconcile period? the maybe just, can account

X% You actually April Peter. it Yes, on It’s bet, COVID Chuck. – the value that took was of XXXX discount, we vehicle off. when

period. than It’s off previous And so profit in that on taken quarter, loan originations XX% the new seeing you’re as XXX adjustment of And the a roughly been compared share in XXXX yet. has the COVID about supplemental, increase certified the during QX a year premium certified it that about loan. bit to per was – comparable little more not XXX $XXX in per the that

will report for more we comparable it be later quarter. second the when So QX forward

the back Okay. queue. it. I’ll Appreciate That’s get helpful. in

Peter. Thanks,

of question line Joseph next of from comes Canaccord. Your Vafi the

line open. is Your

to Nice on know the see I in a know tough And credit you’re I activity they’ve focus I their this CECL seeing afternoon. thought could and – environment. results maybe year, know already. coming Good for steady some got up that that we radar on that I is the unions.

you inflationary I up? and to seeing environment the CECL and a you’re wondering, with partners general have environment unions new for of Just rate CECL some unions have on what may And credit credit and the relative follow-up. then the that coming in what mean potential

the and that I that Tier then The the think evidence shops to I starting even accounts that provide X we continuing it. relief larger just is April, about can we CECL – I appreciate the into think fact the quarter, these position rates XXXX in of through I When of Joe. unions their first and them. we’ve because talked number capital. to for signed just because of of just – increase cost Thanks, are this volume starts increases, continue across again credit Again, kill been of everybody rate of it. the credit continue else in to increase their low to where and regardless I the board rate go, their increases inflation unions actually XXXX, and think the

cost for CECL So with really low capital that well I and up some you good setting the think it’s of couple really relief, us tailwinds.

that a Okay. we That’s helpful. potential with maybe, new to And help could Ross, updates new know I get you that on resource OEM hired partners? any I said you channel. mean, key

We full that’s on we Yes. on and Joe. Yes, brought worked advisor as but him us time. someone with brought consultant, an

also couple positions We out. a have of

that later actually folks are It’s – about we’re ongoing. with they some back conversations the and known the to to on here activity up year all teed our are talking market, joining next there. cemented well going things years the see are We’ve and folks experience be our projects IT week still implementation. know after level have in implementation – got We’re and about that of out in finished the radar to

when from you but these excited it’s So we see looking bell see of we’re they you’re to you’re really doing have – a months the what will at to And it. XX to XX – when historical cannot XX a of today. value curve They on to about vintages prop look actually PD deliver. loss standpoint. use There originations, all what current losses a out

protect that And our XX exactly what to us all well. reason inevitable vintages and months, rated way so from as the XX are you need you there to today’s out is are premiums

not is of typically, having at get been auto And you the bureaus thing people key contacts think it’s the Yes, created bureaus, He lending the talk really which in inside just We to Ross for people. selling volume. the one you the expedites like from do that some risk great. big auto the more that to as gentleman has is background important, with his the that alluded comes I I I’d some can the space. to, well that, Ross, cycle, just add about sales. think our lenders. sales When think they the it’s

the of front on the got we’re to I to kind and we’re finding, people. that with it larger same the got that you get the group We’ve in it getting we that front time. get think looking backgrounds bring risk now Now by to the in of expedite of people at

Yes.

I us over that brought side, right, came years OEM the helping of the on of this finance has You’re now mean out individual person captive been and more we the John. side. out the comes other

So it’s a combination had already we’ve what us both on helping great at. of great them success to have expand

guys. great That’s much. Thanks very

Thank you, Joe.

question Bob next line Blair. of Your William comes from Napoli from the

Your line is open.

This is Napoli. for Bob for Thank the on taking Spencer you guys James question.

on more advantage side? with underwriting? your carrier signing new the the advantages one additional the you announced. does it insurance new on the help carriers? What’s there? Just it insurance are What Is to biggest sales Or biggest

I our nice what it’s over the when at TAM just that and years, five our we’ve just you next large got to plan know think is start how looking is capacity.

economics was same. think just adverse of We a combination. more OEM So four are help over we kind bring there. road. make no to way, down They The of the have and And trying credit time than to and already it us three, But – less, that someone time. done bank, the don’t the better years sure that have do selection. that, we’ve connections just expand. also our there’s it’s can in it’s They to spend what union I world. capacity They’re on financial have great

X them. June our and target anything John, add great so to And is that? do just them, want it’s date board you it’s as to great. launch of to with And

Yes.

and the only that, is the little been we’re bringing our has that bit to all add insurance credibility point the when sign companies done think everything thing to gone to more think due for to I to rules risk market I know where the diligence they’re Spencer, now, you having models, have through and also up brings of the the risks. program, would a on I bedded that underwriting willing size our their it

we’re it’s a I or four So agree to combination just think they have with all great three companies big doing. what saying

which other to one They to agreements, too, think of one exclusive, else. anyone isn’t Spencer, add, I together. of cannot thing our means that course, program tied every offer we’re is this

maintain that no we really, have fact and us certainly has that – so And us the competition maintain just position. helps it helps that today,

growth Okay. base? where expanding customers from? that? about Thank that XXX% really from you. that’s off little credit boxes growth XX a Is Are talk impressive with excluding Could OEMs, coming And The then number. a is top Anything year-over-year, the up low customers? you more you definitely follow-up. one like it just a the those

Go – John. John Yes. start Spencer, I’ll yes. and then ahead,

No. say have lot partners what’s No. his with both. of But team Chuck. rule think some ahead, was been changes a the I to But underwriting is more refinance to driving and of table a bring it’s coupled I of combination expanding that just that. our apps go going Ross to the channel working on,

Yes. noted it. You

I for those focusing in really us. think the customers about good has adding refinance refi inventory and you these on for channel really our and times been growth think the for the challenging during and and customers partners channel if

of The Okay. inflection is in off say more Thanks. what and build in go-to an one. built XXXX? this market. kind is point additional hiring this to some one same hires? mentioned you up Would Or ramping – salespeople you And the last then of incremental just you investments in

not some following combination I a actually. territories think And effort of sales we’re a a we’ve it’s side, part, kind easier OEM, – Solutions. team inflection. they reason salespeople that if bringing we’re But names off most farming you on got credit in fallen into great We’ve And reseller account a putting made not It’s the bank just reputation, we’re space, both existing use a be our from closer business work account from which XX expanding I we’re an have the that managers, think on especially big more for We another. throwing an think and get just accounts. to I dedicated have to I called may we or existing will, the and But are great really of the leads it’s progress. there. Allied think lot for the one it’s the out that in. now union to

You lose and us or don’t a loan officer two, hires about use to enough know the us. new

managers Now by on some more see that. inside account bringing starting a basis, on getting shops regular we’re some more and to our real benefit from doing

Thank you questions. for the

Spencer. Thanks,

Your Caintic from Stephens. next question comes the of from line Vincent

Your open. line is

taking for Arch Thanks on win. questions. my Congratulations the

follow-up I that. So have a question on

Arch the wondering with you’re And on with do in differently. economics really views and or know just So of just you I expand sort I’m and – some new like that global normalizes, Canada with mentioned – maybe product are with credit their sports. company what a of what insurance either of Arch insurance or that in with so the just hearing and are the places, what’s – if their any other And to is with products when that? terms with same. able thoughts appetite companies your Arch terms in the you’re – set curious power anything

want go John, do you to first?

into since products, future And the of have expansion. continue team almost products, a geographic asked earnings think Vincent, to we other executive – Yes. From standpoint time our I digging quarterly. last spent call, lot a get more we

study. on our engaged the We’ve did of that study right Canada. a firm a in process We’re cost-benefit now

We’ve billion back from at of into Leases, what the What look is you we independent standpoint first product? up geographic a when ask a them the an us be LEK. market remember leases. study that was benefit came next TAM, would reengaged called $XXX the a to sports, from company of digging – the with If expansion. to power

you to right in home confronted back of But products, sharing ensure I’ve underwrite small way at look just company other now, a in a via has they another that. the and one loan about is the next just the to that them been talked earnings We answers we’re past. hope popped study. by middle by we’ve which that And to call. a to wants there company claim equity, all up, the data have more that So business need

So appetite is all have we these so the four asset for data. with and conversations based their on carriers classes continue to what different

I’ll future, looking we’ve to the to near there. a Vince, scratched done Yes. off, there’s it I space. come finish we very of and in at decision no be the We’ve surface mean auto. reason gigantic except well – though, anything it’s just that should kind such the think I

continue of – keep never of I opportunities, but to and in other looking at these right Let’s expand sight our lose what’s front us.

up. Okay. And That’s large by they’re on The follow-up. that kind with companies agree – Because just views. just validating point yes, your credit, signed a I their your helpful. of model having these global insurance

about nervous discussions you. kind when credit? Thank are people of of So are your kind how

– Yes. they’ve order of their they’ve up it’s homework. to lot today, done – sign mean, I a obviously in Vincent, own

have actuarial firm work we that with. our We

XX any same Everything we and are everything We collectively, page. done We folks. loan make underwriting over and – out. doing, with have risk XX-month the for our a on from that all those bet internal own all we’ve amount, example, rule been expansion, changes we’re

taken So there’s a that deviation not single one a from has that.

And so has Arch time. around been long a

great a have team We there.

all – in them had the same room we Our partners current together. get have

great in position. a so think I we’re And

would and We not same meetings. happened, to what XXXX XXXX, happened back and – happened and history us we’ve here, And look always – today. got I have the weekly thing to want and they so have what we have

doing And constantly Chuck, so – we’re that. do to you want

and than healthy less is is prepared comments the The percent about disposable which only – share from even. in service Yes. debt consumer as maybe And, in we per my XX% thing track household lowest about consumer, add XX we profit years. that U.S. it’s statistics the some a the Vincent, payments I’d balance income, talked of sheet

the And $X trillion, strong. and heard over banking consumer at think largest this currency So I balance sheets really we deposit think deposits earlier institutions, about is when you the week.

– and consumer credit. which really bode a will it’s healthy for the So

one And last me. Perfect. for one

generate to lot continues business of cash. Your a

to think cash close of now. right $XXX I you’re million

Right.

about your capital your priorities, trading especially stock I’m it as just curious is. with low as

interest just about maybe usage? Just talk back any buying capital stock. in Or

management Vincent. obviously, mean, that’s about we we’re end. strategy and investing Protection the in Obviously, talked year-end obviously the cash sheet we’re roughly in about there quarter business. of go-to-market talked Yes, our the today, and account platform and million some and Obviously, our quarter of $XXX making Thanks, really We the technology, Yes. million priority, enhancing in is, I and in that has again generated use year. the this at the and and $XX call about. it and flow sales enhancements balance and is cash modernization customers first for our in is on marketing on that – the John Lenders

obviously, Board-level look a it’s Board. debt debt that, on buyback $X.X after highly as And It’s actually And basis, debt. lot we of still a the obviously, good a decision, very something net net And and evaluate we’re We’ve with million. negative low the we’re got So of use cash. levered. a how a generate we – cash. we at it’s share not

in but focused definitely we the first more it’s something business. foremost, and but on – – and So investing evaluate that

Thank Great. Very you. helpful.

lot. a Thanks

comes question the Your Raymond Davis of from James. from John line next

Your line open. is

you ramp XX,XXX quarter. hoping the Chuck, XX kind Good – million a search. with little afternoon, just of this guys. or us sorry, help can Obviously, bit in

But average. significantly you is how think back something think ramp. half the least could about guys the XX,XXX think think midpoint the any that we the ramp about on would just on of in how color I assume at going better. if guide today? you XQ us be help I about imply just But maybe search, to it should like or the

Yes. pointed to we earlier for the on QX John, When XX% talked we the QX, – talked yes, midpoint call, we we when which that of exceeded.

about So specific production we’re restocking with results. the the really the it OEMs. channel rate refinance the very depends I not the for get would year, And to around very pleased of to the I we’re to we point – on QX the the the the is on and inventory. you QX Obviously, to the of half the guess be OEMs, really weighted domestic and excited there. really production growth business, and is more second got Large

more going rest continue on the of it’s vehicles to However, and in – inventory take growth. to the

summer months strong. seasonally, However, are

that at we look So well. as

a We feel March month trends And out about year. came bottomed it’s into we bit the but fourth second bottomed. we our of there. dealer in off inventories year. quarter a reaffirmed demand believe a – production of it’s – And guide. the there’s full a little by and the quarter. of And good So encouraged the back-end-loaded lot But and we record

going to is we the is taking So – recovery place. believe

reoccurrence there’s geopolitical rare and backdrops China think the all the couple there. COVID needed in with, I materials of we recently that saw of Ukraine are production that chips shutdown in for a obviously, that earth and the the some

we those the headwinds. of we’re dynamic watch some demand to But are supply executing business. So and ready and run daily, and the

kind So about. but of think the that’s things we long answer,

That’s Okay. helpful. John, minute the competitive about landscape. just talking And a spend maybe

a get crazy some from maybe competitors pricing of year, bit a standpoint. and little last kind to XQ desperate started think I

You six some that called with in and now, to of competitors obviously, of weren’t a you as a But – to were where go environment it three maybe out a kind we’re your from months different headwind later. pricing your willing standpoint. banks

competitive is just would is curious, more your color that seeing banking helpful. banks comfortable credit and Just be there any are with, you today? super your that – are So unions pricing

Yes.

was can to standpoint I an think we which move the bit for kind us. to of little studies Ross risk they all term, Ross need consumer from a were when simply than alluded to studies they went a show speak up of a prime just because if consumer we but that and but all – of the the borrower this they the the big the better were performed XX-month a did, side term near-prime XX-month this on But better, payment.

rates can indicators So payment of to could the default, are being income one their and with insurance with out live exactly default from we’re big stress what term, we of standpoint. that XX-month this our seeing you payment now that into

at. and pay things headwinds in or – consumer into or and picking the an the paid down our get through of ago, offering XX% cost they is might channel roof. that have When the to or that, that to where our we’ve more affordable Santander’s, So maybe the money that’s have that loan Exeter driving door. some loan of to I the some XX% channel sources, funding XX% when loan like door capital a of four rate. them shouldn’t refinance they paying get But in of the a driving two that, high the like the up that think refinance points the XX% is When I high subjected rate that been stuff are looked likes mentioned to, quarters couple Exeter’s,

still I can changes we the that the think well. doing have those what up do So pieces staying course some We’ll that capitalize afterwards. pick we on made just

Okay. there? it’s around for of bounced But one to color assumption cert year? share rest for XXX of Is there, share we quarter. ex assumptions. economic I about the XXX with profit Chuck. this of a more think Obviously, good per how think the COVID about, a look ex economic Chuck, adjustment? kind And run lot the curious the it’s the different or should at that then just and Any quick I kind adjustment, one think If profit rate

modeling We’ve Yes. on No. XXX and depends range that, about think rest year. the good we for it, etc. just there, it and And it some But the the a claims good a there’s We in from call do, number that’s to mix submissions, impact is – internally. be John. to anywhere the XXX going of talked

all Appreciate Okay. guys. color the

you. Thank bet. You

line of Deutsche Faiza question from Alwy Bank. Your the next from comes

line is open. Your

you. Thank Hi. Yes.

you of certs to a and questions do there’s we overall on So how obviously me. percentage about think just a that. a rightly the from sense through wanted end certs get get focus a of One, as couple the it’s increasing, been refi as the because of year of

that. you if on curious have any So perspective

Yes.

about target. I be to talk a as moving certs, it percentage total think going a that’s of when you

those – numbers back grow well. standpoint. come as cars lots, the certainly to will we as But shared pick online is continue – the hope captive think to are numbers I the to and the new refinance going that start hit obviously up channel cars is from a

what stay I high think – but percentage it’s going I or it to a will it couldn’t will number, XX% be. So indicate exactly stay

in. I’ll John, And, jump Yes.

over XX% trading I inventory it. about XX-plus can think there’s you obviously, term, are can near we’re in used we a think And under If cars. inventory. was QX. for – more that, more percent in that inventory – And restocks There’s the used for – it today. little it I I and And time, think percent as people sustain think

– the could think be As more and would forward. absolute restocking But of up, – a going overall our the there’s and inventory are but go it think lower going to search, it indirect there’s percentage numbers. yes, more I units I

So it’s a great opportunity.

your just accounts accounts. if signing then on are of others. And are – economics Tier mentioned can Tier if any different overall of And X what X? like Yes. you X Tier of you share sort you new if Yes. maybe I’m sign percentage curious versus like the accounts

We... Yes.

the... Yes,

Chuck. ahead, Go

was just to going I No. the to refer economics.

loan cert increments cert technology growth. larger a there’s to X% discounts of volumes fee for in XX X% and generally amount fees, and equal. based generate program mean, for economics down I everything roughly large is accounts on the volume that Our

– Tier So – same around And, Xs? you John, on to – the economics want be a bit those. the talk but if little the general the maybe would about the

trying put just a look. yesterday. I to Yes. had I together report just was actually

over the me account. of clients give what Tier number X and that’s are we $X a consider billion, active that You

we and in XXX credit that unions approximately are billion banks assets. So over have $X

Chuck? total, the of one-third So Ross it’s or probably

as of about We’ve Yes. end customers of active XXX. about got quarter

on economics for be the one on accounts thing to think flip question lower program the think profit may add sophisticated the think just I servicing, than good share, the But less the larger her on to those should I sophisticated better would volumes. And platforms. unit ones. to is large will perhaps fee, have results institutions would our be their side, more the you than

So back there’s think do to I between two no Chuck’s materiality in deal, aggregate. the difference

you. Thank Understood.

you. Thank

Your Securities. next comes line of from Northland from Grondahl question the Mike

open. Your is line

that Hey you guys. that term, expanded are roll you loan expanded The from anything the When Yes. did early and And limits April? late out? April, seeing was it?

Yes. yes. Mike,

limits, were thing First to active we keep we get able make is when submitted, an remember release application of a mid-March. in – in all, for XX to whenever that is we And loan one that on days.

time of little So a blend we still line. have

all to except And of So for month. had wanted institutions launched ones three anything X seven or then XX April loan we’ve we or we on impact decisioned this wait out get around, five we more for customers, launched think, about the almost then customers, to rolled side, full the April X; the limit, four April in and next month launched I term or that to the loans, the our other other XX X; that of months.

able be come a to and give results. quarter back we’ll really lot really, more So the next you

results. the by encouraged We’re

amounts you’re saying that know to to yes, larger those a we the to close fully the yes mean, is able these and were of got say the a were third-plus that better. countering, asking a not ratio for countering full but applications you’ve loan Just of fact versus past not larger in terms. I much

result. very anxious tracking actively we’re we’re this with that – So pleased and

said you year opportunity like of from little just of that, three then later more. some for sort I Great. know the you Or think finish I needed a that kind one to And a more. infer OEM projects. to this and you IT Can hunting OEM is Ross, could event? four frame of don’t relation if in that kind we

Yes.

at on would wrapped they project a an our always the with, – thought we’re the that still the end endeavor OEMs that. have project behind close be And they of have IT the year had of always that – up a ongoing We – by fell one project. we

is even behind, hear quarter, still – they’re working date do so third a We though their have they there early – sometime out vendor third that it’s quarter. the working. that is platform, in new they’re And servicing on like

of And we can that we’re revisiting so organization. means kind that that to how launch within start going

only So behind other IT it it’s year. because this think the fallen always projects. was – one I is late of it But it’s behind

momentum look once we And finished, of that. is reporting project status close And some to to that the we’re launching. forward that’s so and here positive

Great. clarification. the for Thanks

Thanks, Mike.

comes question Jefferies. from the [Operator line Hartmayer Sagiv Instructions] And next from of your

of of rate close given headwinds that positivity now just I’m I’m out actually few between the with some to, on. bouncing what’s John I didn’t It’s you Hecht early different the a some changes, it like the close you commented expect and versus this. inventory of called what that’s reports things that when size have it if Sorry. that? guys earnings like, term you your And and some – you wondering, you referred was but would and Jefferies. But of rate apologize on today. issues

companies all that the – I channel. refi by that credit direct it mean, even – varies versus we finance got within Well, within by unions channel. and

the So our during able that close consumer been than it not got rate, but you’ve that lot pre-pandemic. has lower is XX% non-prime is And offer. a applying being of to John, probably afford

the new next why a pricing elsewhere. I just longer the aren’t And decreasing. believe going going we’re over XX they going think that start It’s sideline, months. we’re to we be to slow the we’re term, position the will to that’s – – that so They’re and poised But there we’re the today. on And in do with right sitting offerings.

be of We’re in going that to months, and see XX we there sure. should an uptick for

think to recovery conditions it that as of normalize? you growth sort have is mean, XX% fair in your could just I So

the What’s close rate?

think that’s appropriate. I would

And totally How sensitivity other? unrelated, interact but you guys to perceive question, the second with that do about rates? Okay. each of how the does market then refi the interest

credit to there but That’s XXXX that what they we think an auto they’re bit rates much in unions that average little a make. three XXXX piece south. of went and went continued probably out that we the a lowest were love loans. hungry And I to we’re ties this and always they pretty could answer cost back Yes. – ago. a times to paper stood things John, generates when a to capital is And heading that’s through light unions of And of question, And four it for and there. back in are three-year have did investment yield finding credit going that up

a as always So that company. going the we’re I to tailwind have credit refinance funding real think unions to channel

apologize and very Okay. Appreciate question. thanks redundant for much. But that asking

No, problem. John. Thanks,

guys. Thank you,

to I will Flynn closing remarks. call over turn for the John now

phone. Thank everybody you, operator, the questions today. and thanks Great on to

and tell, can quarter the excited the about extremely we’re you heading. company where is As

be I of help if, not we’re think Cars fund going it’s to about to we a matter always it’s them. there and are when. talk back, coming

about excited we’re So everybody’s appreciate it, and support. we continued

So call. the thanks for

Thanks, everybody.

Great. you. Thank

Thank today’s call. conference participating. you concludes This for

You disconnect. may now